Downstream news update: 16th December 2013

France

Workers at Total’s 119 000 bpd Feyzin refinery, near Lyon, have joined a strike at four other domestic plants run by the French oil company.

Employees at the plant voted to join colleagues at the Gonfreville, La Mede, Grandpuits and Donges refineries as their union rejected a third increased wage offer from the firm.

Total’s management made a fourth and final proposal on Friday afternoon, offering an annual pay rise of up to 1.5%. Unions held votes later in the day on whether to accept the final offer or shut down refineries fully on Saturday morning.

Both the Gonfreville and La Mede plants have voted in favour of shutdown. Employees at the 119 000 bpd Gonfreville facility have issued orders to stop production and are negotiating the sequence of shutdown with management.

The 155 000 bpd La Mede refinery, near Marseille, has also commenced shutdown.

Two other refineries, the 99 000 bpd Grandpuits refinery near Paris, and the 231 bpd Donges plant near Nantes, have not been producing since last week due to technical issues, though other refining activity is at minimal levels due to the strike.

Workers at the Feyzin refinery in Western France, which has been in ramping up mode, will hold a vote today in order to decide whether to shutdown or remain open.

UAE

The Director of Business Development Al Ghurair Investment, Dubai, UAE, Sultan Al Ghurair, has said that his group plans to invest US$ 170 million in order to establish a new refinery in Pakistan.

Iran

Iran has cancelled a planned US$ 500 million loan to Pakistan to build part of a pipeline to bring natural gas from the country.

Deputy Oil Minister, Ali Majedi, has said that Iran has no further obligation to finance the Pakistani side of the project and also doesn’t have the money.

Brazil

Brazil’s petroleum regulator ha announced plans to tighten safety rules. The new safety regulations scheduled to take effect in January, will tighten inspection and maintenance rules at the country’s 13 refineries, all controlled by Petrobras.

In addition, the REPAR refinery, shut down since a fire broke out on 28th November, will only be restored to approximately two thirds of normal operating capacity.

Combined, the two developments mean increased reliance on imported fuels at a company already losing money on fuel purchased abroad.

Peru

The Peruvian Congress has passed a bill that will allow the government to sell up to 49% stake in state oil refinery Petroleos del Peru S.A. to private investors.

New legislation has also facilitated the modernization of Petroperu’s ageing refinery in Talara. Petroperu will finance US$ 2.7 billion of the US$ 3.5 billion cost of the refinery. It is hoped that refining capacity will be increased from 65 000 to 95 000 bbls by the project.